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March 2016
Faster
Payments Tracker
Powered by

Business
Business to Business
Payments (B2B)
8 Billion
The number of B2B checks
written in the U.S. annually, at
a cost of $100 billion.
B2B
B2C
Business to Consumer
Payments (B2C)

Consumer
Consumer to Business
Payments (C2B)
12%
96%
of Americans receive their
paycheck via direct deposit.
rise in the ACH Debit C2B bill
payment transactions in the
U.S. from 2009 to 2014.
C2C
Consumer to Consumer
Payments (C2C)

Consumer
$86 Billion
Mobile C2C payments
estimated in the U.S. by 2018.

Business
C2B
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Faster Payments TrackerTM
Cover Story
Who Benefits The Most From Faster Payments?
As the rollout and adoption of Same Day ACH in the U.S. begins this year, the tangible changes and benefits
across the payments landscape will, in turn, become increasingly apparent. Yet, there continues to be
questions about who really benefits and who really wins. The underserved/unbanked, for one, says Joe Proto, a
30-year veteran of the payments industry and current CEO and Chairman of Transactis.
Use Cases
The shift to same-day and faster payments, in general, Proto said, is the most significant endeavor he’s seen in
his 30 years in the industry. “Same-day and faster payments will give us a lot of the same benefits that we get
by handling card transactions, without using the card rails. That’s revolutionary,” he said.
The reason faster payments is so important, Proto said, is because the four major quadrants of the payments
industry – P2P, B2B, B2C and C2B – are all beneficially impacted when it comes to the expedited movement
of money and data.
P2P
When it comes to P2P payments, Proto pointed to a shifting consumer mindset and, in turn, adoption. For
example, he said, Venmo just recently announced that January was its first billion-dollar month, so users
are clearly finding and using the service more (and telling their friends). And, he said, that’s powerful. “We’re
moving to a user mentality that, if I’m going to send you money, you know you’ve got it pretty much at the same
time that we’ve transacted together,” he said. “So whether we’re two friends who went out to dinner and I owe
you for your half, or whether I’m buying something from you or I owe you something, being able to have that
confidence that the timing is significantly connected to when I initiate, is very powerful. And the surety that
you’re going to receive that payment – you extend that now from timing, when I initiate, is very powerful.”
C2B
This is the area, Proto said, that’s a “really, really big game changer,” especially for the unbanked and
underbanked. He explained: “That single mom, who’s working for near-minimum wage, the only way she’s
(now) going to keep insurance or her utility on is to pay an expedited fee to get that payment surety through.
That can change now. We can serve that [unbanked] and underbanked community in a way that is so much
more efficient and so much less costly, and take away that expense for the part of the bill payer population
that, quite frankly, can’t afford it.” So, he said, with faster payments, the customer saves convenience fee
expenditures while the industry serves up a better consumer experience. It’s a win-win …
© 2016 PYMNTS.com all rights reserved
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Cover Story
… Win. Proto said he sees the benefit to the bill payer as an industry “opportunity to serve” the unbanked and
the underbanked. “I believe that this will help democratize payments in a way that provides for lower costs for
everyone. There’s no loser here. The consumer, the business, and the processors in between – banks as well as
technology companies – I think everyone wins.”
B2B
When it comes to businesses paying other businesses faster, Proto said, with Same Day ACH there should be
a noticeable improvement when it comes to supply chains and distribution in general. Less likely will a truck
be unable to deliver supplies to a market due to delayed payment, for example. When the supplier has surety of
payment, he said, “now faster payments is going to unlock the timing around which those things can happen.”
And the obvious ripple effects that lack of payment can have on the supply chain itself will smooth out.
And jobs themselves are less likely to be delayed due to payment. Proto gave an example of a bulldozer sitting
at a golf course development site because the supplier doesn’t have surety of payment.
“Now faster payments is going to unlock the timing around which those things can happen,” he said. Faster
payments will, in turn, mean faster job completions.
B2C
Proto said he sees the biggest impact in B2C faster payments taking place in instances such as insurance
disbursements. “God forbid my house burned down,” he said as a worst-case example. “I don’t have anything.
And my insurance agent comes and how are they going to help me in that moment? Writing a check is not
going to help. Putting something on my card may not help. I might not even have my card. Being able to do a
faster disbursement, so that now I’ve got access to those funds and do it in a way that is frictionless,” – that,
he said, can make people’s lives better in tumultuous times.
Keeping the dollars and data together
The key to all faster payments transactions, Proto said, is “keeping the data and dollars together.” With the
less exception handling created by the straight-through processing of Same Day ACH, he said, there’s less
time-consuming, labor intensive manual processing. As a result, he said, “we solve so many customer service
issues, [save] so much cost in the system and take advantage of all the good things that the ACH world has
represented, and now accentuate and advance the ACH movement of money.”
Another key to the success of faster payments is user demand and expectation. Millennials, Proto said,
drive adoption and push innovation. He pointed to millennials being used to “single-button” capabilities.
“And when that button is hit,” he explained, “they know their transaction is complete.” Proto said it’s this
expectation that will drive the continued evolution of one-touch ability into consumer bill pay, because ease
of use drives adoption.
© 2016 PYMNTS.com all rights reserved
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Cover Story
Millennials will also drive change that hasn’t been anticipated yet, Proto said, because they are driving the,
‘‘I-want-content-to-find-me-when-and-how-I-want-it, and-I-don’t-want-to-have-my-day-or-life-disrupted’ mentality.”
If it’s easy, he said, millennials will adopt it. If it becomes difficult or cumbersome or time-consuming, he said,
then they’ll abandon it.
And it’s not because they don’t care. Millennials, he said, want safety and security like everyone else, but they
are simply unwilling to have their day disrupted to ensure it. They know what they need and want. Faster
payments, Proto said, gets them there.
To this end, Proto envisions a day where paper itself will be entirely removed from the payments equation
and everything, including invoices, bills, and bill payments, will all live in one place. “I think we will see – and I
think faster payments will help drive, finally – what everyone’s predicted but nobody’s succeeded at: a digital
consumer mailbox, where we will be able to have everything stored in one place, smartly sorted, when and how
we need it, essentially forever.”
This means, he said, the days of physical mailboxes and metal file cabinets in basements and attics are
numbered. In turn, Proto said he thinks Same Day ACH will benefit the digital consumer mailbox the same way
that billers and their customers are going to benefit from Same Day ACH.
Everybody wins again, he said. With one likely exception, he noted: The United States Postal Service.
It’s go-time for faster payments in the U.S.
The U.S., unlike some other places in the world, hasn’t quite gotten there with faster payments yet but, as Proto
pointed out, each individual country in the E.U., for example, has very few financial institutions compared to the
U.S. “We want to be all-inclusive. We want all the banks to be able to participate and by having that inclusive
spirit, things take a little bit longer.”
We’re going to get there, he said. “And, by the way, when we do get there, I think we will come up with
improvements that the rest of the world will look to. And I think we’ll start to see international faster
payments, at a lower cost, with surety. And that whole part of the financial ecosystem will benefit and
be improved as well.”
Proto, overall, said he is feeling buoyed about the future of faster payments.
“[The industry is] doing the right things and we’re going to do this right and I have a tremendous amount
of confidence that we’re all ready to make this happen,” Proto said.
© 2016 PYMNTS.com all rights reserved
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Executive Summary
The PYMNTS Faster Payments TrackerTM, powered by NACHA, is your go-to resource for staying up to date on
a month-by-month basis. The tracker highlights the contribution of different stakeholders, including institutions
and technology coming together to make this happen.
In this month’s tracker, we cover the latest news and developments in the Faster Payments world, including the
most recent notable player forays with the blockchain.
Here’s a sampling of some recent Faster Payments news items:
In mid-February, IBM announced blockchain-as-a-service in order to assist distributed ledger developers
and enable blockchain usage industry-wide. The new cloud computing service will help programmers and
developers build blockchain test networks.
In another push to accelerate the adoption of real-time payments technology, Accenture recently announced an
investment and alliance with Digital Asset Holdings, a developer of blockchain technology. Together, they will
collaborate to bring innovative solutions to financial institutions, among others.
And in other recent blockchain news, it turns out that Bank of America is filing for blockchain-related patents, in
an effort to keep up to speed, if not ahead, with developments in the cryptocurrency space.
Clearly the investments and interest in blockchain technology is for real. What has yet to be determined
is whether the blockchain itself will ultimately be the technology used as the foundation for a financial
industrywide real-time payments solution. As MPD Founder Dr. David S. Evans put forth in last month’s tracker
cover story, the blockchain itself likely isn’t the solution. But clearly players, in the least, are finding lots of
reasons to invest and research the technology.
We’ll continue to follow the latest developments in upcoming trackers.
Enjoy the tracker!
© 2016 PYMNTS.com all rights reserved
5
News
NACHA – The Electronic Payments Association
Payments Innovation Alliance Members Meeting
NACHA’s Payments Innovation Alliance is a group of 200 member organizations from the payments
industry, which promotes dialogue and cooperation to improve the current payments capabilities available
in U.S. and worldwide.
An Alliance Members Meeting was held Feb. 22-24 in San Francisco, with the aim of giving industry leaders
the chance to exchange ideas and present their new innovative payment solutions. According to the meeting
agenda, Alliance members participated in interactive discussion forums where the issues discussed included:
•
•
•
•
Millennials and Payments: Thoughts, habits and preferences around e-billing, mobile and
digital wallets, among other topics.
Driving Innovation in Financial Services: Perspectives from Wells Fargo and Umpqua Bank.
Instant Payments: Recent activities, announcements and impacts related to real-time, instant
payments and relevant efforts in the U.S., Europe and Asia to reach faster payments.
Mobile Wallets: Products, trends and recent strategies.
The Federal Reserve Bank
Fed releases progress report on efforts to improve U.S. payment system
One year after the release of its Strategies for Improving the U.S. Payment System, the Federal Reserve Bank
has released a report outlining progress and highlighting the new instructions for moving forward with its
initiative to bring real-time, efficient and more secure payments to the U.S.
Among the achievements from the Fed framework is the creation of two task forces with more than 500
members from the payments market. The task forces are focused on speeding up payment processing
systems and increasing security. They have developed 36 criteria with the desired features of a faster payment
system that will help to create efficient solutions. The criteria are grouped into six different categories: ubiquity,
efficiency, safety and security, speed, legal, and governance.
Additionally, the Fed refers to its efforts to implement the financial messaging standard ISO 20022 for wire
transfer systems and the extended Same Day ACH settlement. And collaboration among the Remittance
Coalition, NACHA and the Fed has been a key factor in the adoption of the ISO 20022 international standard.
During the last year, the Fed said it has used many strategies to keep stakeholders updated and to encourage
the implementation of standards.
© 2016 PYMNTS.com all rights reserved
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News
Blockchain
IBM launches blockchain-as-a-service for developers
IBM recently announced that it is seeking to help developers rapidly build distributed ledgers that can
securely be used to make any kind of transaction. In order to speed up blockchain usage industrywide,
IBM has announced blockchain-as-a-service, a new cloud computing service that will enable programmers
and developers to build blockchain test networks where members can securely transfer assets instantly
and automatically.
IBM cloud can be used on IBM mainframes computers through APIs to support new payment, settlement,
supply chain and business processes.
The company has also launched an agreement with Japan Exchange Group, Japan’s largest stock exchange,
to evaluate how IBM blockchain resources can be used for trading and settlement in low transaction markets.
Digital Asset partners with Accenture, Broadridge and PwC to accelerate blockchain adoption
The blockchain technology company Digital Asset recently announced partnerships with Accenture,
Broadridge and PricewaterhouseCoopers to ensure the adoption of its distributed ledger solution by financial
services companies. This agreement is also intended to help to accelerate blockchain technology deployment
on a large scale and, as a result, enable faster transactions.
Accenture will offer consulting and system integration services, including feasibility studies, business case
assessments, operating model design, and advisory services on systems architecture, cybersecurity, cloud
implementations and full-scale systems integration. This is intended to accelerate blockchain adoption by
helping banks and financial institutions implement the technology and enhance operational efficiency, security,
customer service, and also unlock new revenue streams.
PwC will help Digital Asset clients to understand its technology, providing strategic and technical services from
its blockchain portfolio. Additionally, the Broadridge partnership will help Digital Asset deliver its technology
through Broadridge’s services infrastructure and security features. Broadridge will also help drive adoption of
business use cases of the blockchain technology.
D+H’s global PAYplus solution to move money in real-time
In early February, financial technology provider DH Corporation (D+H) announced it successfully integrated
blockchain distributed ledger technology into its global payment services offerings.
The blockchain solution was developed as an extension of D+H’s PAYplus solution. PAYplus is a global
payments platform that helps financial institutions manage different payment types and currencies across
national borders. According to the company’s press release, integration will enable D+H’s clients to use
blockchain technology to connect bank networks, and process high value and instant payments. PAYplus can
now process P2P payments in real-time, with more security and reduced risk.
© 2016 PYMNTS.com all rights reserved
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News
Bank of America files blockchain-related patents
As it turns out, Bank of America also wants to be part of the latest developments in blockchain technology.
To that end, the company is trying to patent some of the technology use cases. Bank of America submitted
15 blockchain-related patents last year and as of last month was in the process of drafting 20 more.
Last December, the U.S. Patents and Trademark Office (USPTO) published a list of patent applications filed
by Bank of America. The list showed proposals for a “cryptocurrency risk detection system” and “suspicious
user alert system,” among others.
21 Inc.’s high-frequency microtransactions channel
Bitcoin startup 21 Inc. has launched a new payments system that enables high-frequency bitcoin
micropayments between devices, without the need to create hundreds of entries on the bitcoin blockchain.
The new bitcoin micropayment channel offers a wide range of capabilities. The main advantage of these
features is to set up future payments. Users, for example, will be able to pay their services in real-time
upon receiving them.
Align Commerce launches payments rail to China
Align Commerce, a global payments provider that offers quick and secure transactions, has announced
the opening of its new payments “China corridor” to enable businesses to send and receive payments to
and from the country.
The company developed the multi-rail technology by combining the blockchain with traditional payments,
simple invoicing and real-time payments tracking. The technology allows businesses to move money
across borders almost instantly.
DWOLLA
New bank transfer API released
Dwolla, a payments network that allows users to send, receive, and request payments, has launched the
newest version of its bank transfer API. The new API gives businesses and platforms better functionality, faster
integrations and improved support for integrated payments, usage-based subscriptions or variable billing and
seamless bank verification.
The new application programming interface is aimed at usage-based providers, such as advertising platforms
or cloud-services companies, which need an easy and quick way to collect payments. The API will allow firm
payers to authorize transfers from their bank accounts. The authorization is digitally provided to Dwolla during
a one-time bank verification process which is supported by a Dwolla integration.
According to Dwolla, the previous version of the API, released last September, will continue to be supported.
© 2016 PYMNTS.com all rights reserved
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News
SWIFT
SWIFT putting the pedal down
SWIFT, the global provider of secure financial messaging services, recently announced details of the new,
extended services it intends to bring to market over the next 18 months.
This move, otherwise known as the SWIFT global payments innovation initiative, looks to uncover and promote
a better payments experience tied to international transactions, focused on security, compliance and global
reach. Announced last December to much fanfare, this initiative is SWIFT’s acknowledgement that the status
quo can no longer stand in a digital payments world increasingly crowded with options.
Forty-five banks have signed on, which represents roughly 70 percent of the cross-border transactions that
come from banks today.
ACI WORLDWIDE
ACI to power TCH’s real-time payments
ACI Worldwide, the electronic payment and banking solutions provider, recently announced that it is partnering
with The Clearing House (TCH), to support its real-time payments initiative in the U.S. As reported in its press
release, the initiative will allow financial institutions to make payments instantly.
ACI has already taken part of the implementation of similar payments capabilities in key markets such as the
U.K., Singapore and Australia. Based on its extensive experience, ACI points to ubiquity and fast onboarding as
the two success factors that leverage faster payments.
TCH and ACI are working together to offer financial institutions the necessary features to provide their
customers with immediate payments. Currently, they are designing and developing an access capability to
be managed by participants or via a fully managed cloud-based service, which provides basic connectivity to
stand-in processing, risk management and fraud prevention.
ACI launches UP Retail Payments
ACI Worldwide recently launched its UP Retail Payments solution. UP Retail Payments is a combination
between ACI’s BASE24 and UP BASE24-eps retail payment platforms, and ACI’s Universal Payments
Framework, an end-to-end solution that offers a wide range of payments capabilities and orchestrates any
payment type, channel, currency or network.
UP Retail Payments will enable faster introduction of new payment methods, adherence to new payment
networks and integration with new partners. This will help banks address current and next-generation market
needs regarding real-time payment environments.
© 2016 PYMNTS.com all rights reserved
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News
MORE FASTER PAYMENTS NEWS
EastPay conference: Same-Day ACH and Fed’s faster payments framework to be featured in March
The Federal Reserve Bank of Atlanta together with Cambridge Global Payments, EastPay Advisory Services,
Affirmative Technologies, Digital Transactions and NACHA are sponsoring EastPay’s Information Interchange
2016, a payments industry conference taking place March 1-3 at the Caribe Royale in Orlando. The conference
will address issues such as strategies to improve the payment process, as well as payment security and vital
insights about electronic payment applications and their risks and benefits. Among others, the main topics
to be discussed at the conference are the latest updates on Same Day ACH and the Fed’s faster payments
framework. Speakers include: Jan Estep, President & CEO of NACHA; Steve Ledford, SVP of Product and
Strategy at The Clearing House; Nell Campbell-Drake, VP of the Federal Reserve Bank of Atlanta; David
Peterson, Chief Strategic Officer of i7 Strategies; and Jim Stickley, CEO of Stickley on Security.
TransferTo partners with Vodafone to provide faster international money transfers
Vodafone and TransferTo, two global money providers, announced an agreement to enable real-time
international money transfers via M-Pesa. Consumers and organizations will now be able to send instant
payments to M-Pesa accounts worldwide.
TransferTo offers an exhaustive solution which fulfills the relevant regulatory standards and connects M-Pesa
users via a single connection. The partnership is intended to help speed up transactions and make them easier.
Payment Data Systems to provide expansion funding to new startup
Payment Data Systems, a solutions provider of secure payments processing, recently announced an expanded
partnership with its customer C2Go Inc., a technology startup. As part of the agreement, Payment Data
Systems will finance C2Go’s expansion of its B2B operations.
C2Go is an electronic payment systems provider with an online mobile-friendly platform that enables
businesses to routinely pay group recipients and receive payments from different businesses. C2Go collects
the required information, along with the recipient’s tax information, and sends them payments in real-time.
MShift Inc. to expand AnyWhereMobile Mobile Payment Network
Mobile payment solutions provider MShift Inc. and Team One Credit Union are working together on the
expansion of the MShift AnyWhereMobile Mobile Payment Platform. According to a press release, the
AnyWhereMobile payments network, integrated into Team One’s mobile banking app, offers members an
inexpensive mobile payment option that enables them to purchase in an easy, secure and quick way with
participating merchants. Additionally, members can send real-time P2P payments to anyone.
According to MShift, AnyWhereMobile transactions are the same as real-time account transfers within
the same bank or credit union. Merchants can receive payments automatically, secured by the customer’s
bank or credit union.
© 2016 PYMNTS.com all rights reserved
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